(CNN) – With the Dow soaring above 17,000 last week, are you thinking it’s time to take the money and run? Analysts say not so fast. Many believe this bull market may still have legs to run.
Even though many see 17,000 as a purely psychological milestone, it came quickly; analysts weren’t expecting the Dow to hit 17K until December. And it took just seven months for the average to go from 16,000 to 17,000. So why hold on for longer, if we’re seeing these highs?
First, look at the big picture: this year’s performance is only modest. The Dow is up about 3% this year, but that’s only 30 stocks. The S&P 500 is up just 7% this year. Compare that to the whopping 27% rally last year.
Second, if you look at the historical value of stocks, they’re still not that expensive. So while you’re paying more for stocks because the market is pushing higher, analysts say overall those prices don’t suggest a pullback quite yet.
Also, the economy is getting better. The last few jobs reports have shown serious gains in employment.
Housing has been another bright spot. New and existing home sales are up. And mortgage rates continue to stay low.
The other thing investors are looking towards is corporate earnings: the report cards of public companies here in the US. If those profit numbers are solid, that could help keep the rally going.